Board of Directors Meeting Minutes - December 15, 1998

A meeting of the Board of Directors of the Universal Service Administrative Company (USAC) was held at the Ronald Reagan Building/The International Trade Center, 1300 Pennsylvania Avenue, N.W., Washington, D.C., on Tuesday, December 15, 1998. Ms. Lisa Rosenblum, Chair of USAC, called the meeting to order at 11:05 a.m. EST. Ms. Cathy Howard, Executive Assistant to Ms. Cheryl Parrino called the roll for Mr. Robert Haga, Acting Secretary.

1. Approval of minutes of Tuesday, October 20, 1998, Tuesday, December 1, 1998, and Monday, December 7, 1998 – On a motion duly made and seconded, the Board unanimously approved the minutes, as distributed, of the October 20, 1998, December 1, 1998, and December 7, 1998, USAC Board of Directors’ meetings.
   

2. 1999 Meeting Schedule Change – Ms. Parrino explained that the dates originally voted on by the USAC Board for the July 1999 meeting dates conflict with the National Association of Regulatory Utility Commissioners’ summer meetings, which several of the Board members attend. An informal survey of the Board showed that most members are available on July 26 and 27. For those unable to make those dates, telephone conferencing will be available for that meeting.
   
   On a motion duly made and seconded, the Board unanimously adopted the following resolution:
   

   RESOLVED, That the USAC Board of Directors changes the July 1999 USAC Board of Directors meeting dates from July 19 and 20 to July 26 and 27.

   The Board asked USAC if the question of the USAC Board being allowed to meet in locations other than in Washington, D.C., had been put to the FCC yet. Ms. Parrino stated that she made an informal inquiry to the FCC on this issue. The FCC responded that the USAC Board would need to submit a formal request to the FCC to change this requirement since it is specifically stated in both the original FCC order that established USAC as well as in the new merger order that all USAC Board meetings are to be held in Washington, D.C. Ms. Parrino felt it was not in the best interest of USAC to pursue this provision at this time. The Board then asked if the USAC Board could meet elsewhere informally for such events as visiting various offices or industries of the Board members as a way to better familiarize themselves with the different entities they are associated with. Ms. Parrino said that she would investigate the question and find out what constitutes a formal or legal gathering of the USAC Board.
   

3. FCC Approval of USAC CEO – Ms. Parrino explained that the language in the new merger order from the FCC would require approval of the USAC CEO by the Chairman of the FCC. Mr. Jackson thanked Ms. Parrino on behalf of the Board for all her work in moving along the reorganization of USAC.
   
   On a motion duly made and seconded, the Board unanimously adopted the following resolution:

   RESOLVED, That the USAC Board of Directors directs that a letter, signed by the Chair of the USAC Board of Directors, be submitted to the FCC Chairman, Mr. William Kennard, seeking approval of Ms. Cheryl L. Parrino as its CEO.

   Ms. Rosenblum noted that Ms. Parrino’s contract expires May 31, 1999. She suggested that the Executive Committee should take up the issue of the possible renewal of Ms. Parrino’s contract. The Board was agreeable to that suggestion.
   

4. Report on the Readiness of USAC Operations for the Year 2000 and an Opinion on the Liability of Directors and Officers – This issue is a follow-up to a request from Mr. Hess to determine if the USAC computer systems and applications are capable of functioning in the Year 2000, and what actions are required of the directors and officers of USAC to avoid liability in the event a system should fail. Ms. Parrino reviewed the steps that have been taken to address this issue and reported that she is confident that USAC is ready for the Year 2000, as are all the outside vendors that USAC is currently using, and that as long as the officers and directors of USAC continue to address this problem and take corrective action, they will avoid any liability in the event a system should fail.
   
   On a motion duly made and seconded, the Board unanimously adopted the following resolution:
   

   RESOLVED, That the USAC Board of Directors directs the staff to provide a report to the Board at each quarterly meeting regarding the status of the efforts to comply with Year 2000 standards, and
   
   RESOLVED, That the USAC Board of Directors determines that the resources dedicated to resolve Year 2000 issues are adequate at this time.

5. Merger Issues – Ms. Parrino reviewed the status of the merger agreement. The Rural Health Care Corporation’s Board members voted unanimously for the merger agreement on Friday, December 11, 1998. The Schools and Libraries Corporation’s Board members voted unanimously for the merger agreement on Tuesday, December 15, 1998. The USAC sole shareholder, the National Exchange Carriers Association (NECA) will vote on Monday, December 21, 1998. Ken Levy of NECA was authorized on December 8, 1998, to cast the vote for NECA. There is no further action needed by the USAC Board. The USAC Board conference call that was tentatively scheduled at the October Board meeting for December 28, 1998, has been canceled.
   

6. Miscellaneous
   

• Evaluation of Board Materials and Meetings (Response Requested) – Ms. Parrino requests that each Board member fill out this two-page evaluation regarding the format and process being used to prepare and distribute the Board materials.
  
  

• Copy of Letter to the FCC Seeking Clarification of the "Calculation of the Cap on the High Cost Support Fund Using a Split Year for Rural and Nonrural Companies" per Board resolution, Agenda Item #22, October 20, 1998 – For information only.
  

• Expense Report Form – Attached for submitting travel expenses for this meeting.
  
  

• January 1999 USAC Board Meeting – Ms. Parrino briefly reviewed the agenda items gathered to date for the January 1999 USAC Board meeting:
  

• Consolidated Budget

• Formally vote to create committees for the Rural Health Care Program and the Schools and Libraries Program

• Formally select and appoint USAC Board members to staggered terms

• Personnel: organizational structure, benefits, contracts, etc.

• Possible tour of new office space before dinner on Monday night (dinner at Max’s of Washington)
  

7. Authorization to Purchase Furniture for USAC’s Washington, D.C. Office – Ms. Parrino and Mr. Haga reviewed the furniture needs for the new office space at 2120 L Street, N.W., Washington, D.C. Mr. Haga assured the Board members that all desks will have adjustable keyboard trays and that all office chairs meet ergonomic standards. Mr. Haga noted that the move date to the new office space is still to be determined, but he is currently planning the move for the week of January 11, 1999.
   
   On a motion duly made and seconded, the Board unanimously adopted the following resolution:
   
   RESOLVED, That the USAC Board of Directors authorizes the USAC CEO to purchase office furniture through the services of the architectural firm of O’Brien, Travis & Jaccard for USAC’s Washington, D.C. location.
   

There being no further business to attend to, Ms. Rosenblum adjourned the meeting at 11:42 a.m. EST.

____________________________________
Robert W. Haga
Acting Secretary/Treasurer

January 26,1999
Date